Pressure from last month’s intensified crackdown by the People’s Bank of China is being felt by exchanges serving Chinese users
KuCoin has joined the list of crypto entities halting service to customers in Mainland China. According to the company, the decision was reached to comply with the People’s Bank of China (PBoC) order, which declared crypto trading illegal. The central bank led nine other governmental bodies to enact the order late last month. The ban was based on the risks of crime and fraud associated with the use of crypto.
The 2013-founded KuCoin informed Chinese users on the platform on 3 October that they had until the end of the year to close all active positions and withdraw their funds from the exchange’s wallet. The exchange said it would give subsequent reminders to the affected customers via e-mail until the 31 December deadline. KuCoin also explained that following the governmental order, it conducted an internal review to reach a verdict that leaving the country was the best option for the exchange
The PBoC has been hot on the heels of crypto companies in China this year. With the development of the Digital Yuan (China’s CBDC) in progress, the government has further tightened the rules on other cryptocurrencies. Not just trading has fallen victim, as the Chinese government has also cracked down on mining, with the state citing environmental concerns.
KuCoin’s announcement follows Huobi’s, which came about a week ago. Huobi exchange informed the public that it would no longer be taking on new users from China. The exchange added that it would progressively close all active accounts by 31 December. Huobi has since moved 100,000 bitcoins from its mining pool to generate approximately $4 billion in funds which will reportedly be used to clear client withdrawals.
“Huobi Global will gradually retire existing Mainland China user accounts by 24:00 (UTC+8) on December 31, 2021, to ensure the safety of users’ assets. We will inform users of the specific arrangements and details through official announcements, e-mails, inbox messages, etc.”
Huobi had already started relocating part of its business as it sought to downsize operations in China. The exchange is now expected to shift its attention to crypto-friendly locations such as Singapore. In addition to Huobi, Binance also announced that it had stopped accepting registrations from Chinese mobile numbers and that the Binance app was no longer available in that region.
“Binance takes its compliance obligations very seriously and is committed to following local regulatory requirements wherever we operate,” a Binance spokesperson told CNBC.